The chief ministers’ committee on digital payment on Tuesday submitted its interim report to Prime Minister Narendra Modi, recommending an array of tax incentives and subsidies. The committee, headed by Andhra Pradesh Chief Minister Chandrababu Naidu, has suggested that there should be a limit on cash in case of big transactions. It also asked the government to levy a cash transaction tax on withdrawals of Rs 50,000 and above, reported PTI.
Besides, the committee has also recommended that the Merchant Discount Rate, which is charged to a merchant by a bank for providing card services, should either be slashed or done away with. The committee members said the government should rather “incentivise” to promote Aadhaar Enabled Payment System.
The panel, which also included Maharashtra Chief Minister Devendra Fadnavis and his Madhya Pradesh counterpart Shivraj Singh Chouhan, added that a Rs 1,000 subsidy should be granted to non-income tax assesses when they buy smartphones. The other recommendations were tax incentives for micro ATMs, biometric sensors and tax refund for those using digital payment. They also suggested that all government branches should switch to digital payments.
Apart from recommending a slew of measures, the committee members have also highlighted that lack of hardware hindered digital payment. Besides, they pointed out that the internet connectivity needs to be improved.
Chief Minister Naidu said he was certain that most of these recommendations would be included in the upcoming Budget. “I am very confident about that,” he told PTI. The chief ministers’ committee was set up by the Niti Aayog in November last year to examine demonetisation and promote digital payment systems in the country.
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